Cyprus Delays Bailout Vote Amid Russian Rebuff

An emergency session of the Cyprus parliament to race through a raft of bills aimed at raising billions of euros to secure an international bailout has been delayed, prompting complaints from its banks.

The session, which was to have started at 8.00am GMT, was held off as the parliamentary finance committee re-examined the crucial bills.

The Bank of Cyprus, the island's largest, urged politicians to accept the option of a tax on bank deposits which they had earlier rejected to save the island's banking sector from collapse.

"It should be understood by everyone ... especially from the 56 members of parliament ... there should not be any further delay in the adoption of the eurogroup proposal to impose a levy on deposits more than 100,000 to save our banking system," bank chairman Andreas Artemis said in a statement.

Earlier the chief of ailing Cyprus Popular Bank, the island's second largest, slammed the government's proposed "Plan B" to win the EU bailout, saying an earlier plan to tax deposits would have been preferable.

"Although we knew the gravity of the situation, and the initial proposal of the eurogroup was painful, it ensured the future of the banking sector," Takis Phidias told state radio.

The voting delay comes as Russia rejected an approach from the Greek Cypriot government to help finance a restructure of the island's troubled banking sector.

Cyprus' finance minister left Moscow empty-handed on Friday morning after Russia turned down appeals for aid, leaving the island to strike a bailout deal with the EU before Tuesday or face the collapse of its financial system.

The original terms of a rescue plan for Cyprus proposed by the troika of international lenders would have slapped a levy of up to 9.9% on bank deposits to raise 8.5bn euros (£7.23bn).

The Russian rebuff has left Cyprus looking increasingly isolated, with the deadline looming to find billions of euros demanded by the EU in return for a 10bn euro (£8.5bn) bailout.

It was overwhelmingly rejected by the southern Cyprus parliament, leaving the government scrambling to put together a Plan B.

Banks in Cyprus closed their doors last Friday and will stay shut until next Tuesday, but as rumours spread that the Popular Bank would never re-open, customers rushed to cash machines to withdraw what they could - prompting it to limit daily withdrawals at 260 euros (£220).

Meanwhile, key European officials have strengthened their tone over the Cypriot manoeuvrings

German Chancellor Angela Merkel told politicians she wanted Cyprus to remain in the eurozone but the island had yet to realise that its business model was dead, according to parliamentary sources.

Germany's finance minister said in an interview that the EU was ready to help but the burden must be shared by Cyprus' financial sector otherwise the island's economy will collapse under debt.

"The perception that this (Cyprus) problem can be solved only by taxpayers in the eurozone without the participation of major creditors of Cypriot banks cannot be accepted by Europe's citizens," Wolfgang Schaeuble said.

:: European Central Bank governing council member Marko Kranjec has said he was sure that Slovenia's troubled bank sector would not follow in the footsteps of Cyprus.